Two decades ago, the angel investing realm was noticeably devoid of women, with only 5% participation. By 2022, women had begun to leave a significant mark, comprising 40% of angel investors and backing 31% of companies that received angel investments. This remarkable transformation mirrors wider societal and business advancements.
The pioneering steps were taken in 2004 with the inception of Golden Seeds, an angel network with a focus on businesses helmed by women. Despite initial doubts, the founders were driven by the increasing number of women entrepreneurs and the corresponding rise in women’s capital, skills, and networks available for startup investments.
Golden Seeds’ trajectory, involving over $180 million invested in close to 250 companies, has underscored the profound economic and social impacts that women entrepreneurs and investors can have. These companies went on to raise an additional $2 billion, demonstrating the viability and success of this investment strategy.
Nonetheless, it is still too soon to declare a complete victory. The disconnect between women’s innovative contributions and the slow pace at which they receive venture capital funding remains a significant issue. In the U.S., women lead half of the new businesses, yet over 80% of VC-funded deals in 2023 still favored all-male teams, a fact that is both perplexing and disheartening.
From their extensive experience, the founders of Golden Seeds suggest several ways for the venture capital community to better support women-led startups:
- Recognizing the proven financial outperformance of companies with gender-diverse leadership.
- Shifting away from pattern recognition strategies that favor familiar profiles over innovation, often at the expense of women and minority entrepreneurs.
- Acknowledging the potential in startups nationwide, beyond the traditional coastal VC hubs.
- Increasing the number of women in VC decision-making roles, which correlates with higher funding rates for women entrepreneurs.
After two decades of advocating for investment in women-led startups, it is clear that what began as a trend has evolved into a mature movement. With robust data and accumulated experience, the positive impact of women entrepreneurs and investors is undeniable. Yet, the venture community’s shift towards gender equity and inclusiveness is still unfolding.
The venture ecosystem must continue to champion diversity by creating new opportunities for varied entrepreneurs to gain access to the funding and support they need. The future of venture capital, enriched by the insights and leadership of women, promises not only improved outcomes for women entrepreneurs but also significant economic growth and innovation for all.
